Headlines this morning from Russia suggest its forces are preparing to resume offensive operations. As mentioned yesterday, the headline risk is not going away. The trading firms that rely on algorithms to trade headlines are being whipsawed day to day. This is likely part of the reason why we have seen volume decrease over the last month.
Grains are recovering some of their early week losses. May corn is up 20 cents while December is up 13. May soybeans are up 33 cents while November is up 26. Wheat is up 20 to 25 cents across the three exchanges this morning. Also important to watch is the bull spreads. They are recovering today as well, which is a good sign that we may have put in an important low yesterday.
USDA reported a flash sale of 128,000 metric tons of soybeans to Mexico this morning. This sale is slatted for new crop marketing year.
Livestock are softer this morning, presumably because of the stronger grain market. April feeder cattle are down 85 cents while the May contract is down $1.15. April Live Cattle contract is down 40 cents as June is down 32. Lean Hogs are also lower to start the day as the April contract is down 57 cents and June is down 12 cents.
Crude oil is recovering today as well after a rough start to the week. The May contract is up $4.25 near the $108.50 level. RBOB gasoline is up 12 cents while Ultra Low Sulfur Diesel is up 16 cents. The energy traders are watching the headlines all day long. The up and down rollercoaster the energy market has been on is likely to stay in place until the war is officially over.
About the Author: Bob Linneman is a commodities broker with Kluis Commodity Advisors. Linneman grew up on a diverse farm in eastern South Dakota. Between milking cows, managing a beef herd, and farming various crops, he experienced many aspects of agriculture firsthand. After graduating from North Dakota State University with a degree in business, he moved to Hawaii with his wife. There he was an associate portfolio manager for a fixed income firm that managed $2 billion in assets. After nearly two years in Hawaii, he moved back to the Midwest and began his career in commodities. Linneman is licensed as a Series 3 and Series 30 commodity broker.